Stephen Mihm Accept No Imitations
The campaign against counterfeits, past and presentPart I | Part II | Part III | Part IV

It has been called the "golden age of counterfeiting" by one historian. Between the Revolution and the Civil War, counterfeiters operated with impunity throughout the United States. Many became folk heroes for their exploits, and more than a few observers in the fledging republic feared that the economy would drown in a flood of bogus currency. Newspapers of the day published breathless warnings of counterfeits circulating throughout the country. An issue of Niles Weekly Register from 1818 warned of a single fraudulent emission of notes, telling its readers that "more, much more, perhaps, than a million of dollars in counterfeit and altered notes, have very recently been manufactured." The warnings only intensified as the decades passed, and by the early 1860s, the New York Times concluded that "there are very few persons, if any, in the United States, who can truthfully declare their ability to detect at a glance any fraudulent paper money . . . In spite of all precautions," the paper observed, "every merchant has his pile of counterfeit money, and his hourly fear of having it increased."

Between the Revolution and the Civil War, counterfeiters operated with impunity throughout the United States. Many became folk heroes for their exploits, and more than a few observers in the fledging republic feared that the economy would drown in a flood of bogus currency.

The antebellum eras counterfeiting problem was a consequence of the nature of the money supply at this time. There is a tendency to assume that the greenback is a timeless creation, that the nation-state has always taken the lead in issuing and safeguarding the currency. Nothing could be further from the truth. Prior to the Civil War, the United States exercised little control over the money that circulated within its borders, having abdicated that responsibility decades earlier.

In fact, the roots of the problem date back at least to the previous century, when the colonists began issuing paper money contrary to the wishes of the imperial authorities. They had good reasons: in a specie-poor economy, it was absolutely necessary to have some circulating medium with which one could transact business. The British passed laws banning the practice, but to no avail. And a curious North American tradition of monetary democracythe right to "make money," literallywas born, one that reached its apotheosis during the American Revolution, when the fledgling nation financed its independence with a flood of paper money.

Fig. 1. Front of the three-dollar bill, printed in Philadelphia, May 10, 1775. Courtesy of the American Antiquarian Society.

The Constitution marked an attempt to reverse this trend in that it forbade individual states from issuing "bills of credit." Yet at the time, those three words had a very specific meaning: the paper debt of governments (and occasionally individuals) issued as legal tender. Paper money issued by state-chartered banks, or "bank notes," did not have the same pretensions, being nothing more than surrogates of money, slips of paper that could, in theory, be converted to real money (specie) when presented at the counter of the issuing bank. Within a few years of the ratification of the Constitution, a growing number of states had chartered banks and other corporations that could issue their own money. The upshot was not, perhaps, what the framers of that document had in mind when they attempted to "shut and bar the door against paper money," in the words of one delegate. While only a handful of corporations issued their own notes in the 1790s, approximately 250 did by 1815, and by 1830, the number climbed to 330. Ten years later that number jumped again to 901, dipped in the early 1840s, and then skyrocketed again in the 1850s. By 1860, some 1,562 banks, or "rag manufactories," as one critic called them, churned out a dizzying stream of colorful bits of paper.

Banks, left to their own devices, did not issue their notes in concert, nor did they subscribe to a uniform design. As a consequence, the look of an individual bank's notes depended on criteria as disparate as the personal preferences of a corporation's board of directors, the regional or commercial allegiances of the institution, and the relative cost of engraving the pictures, or vignettes, on the bills. Antebellum bank notes thus portrayed a bewildering array of individuals and events drawn from history, mythology, and fiction: Lafayette, Martha Washington, Saint George and the Dragon, Poseidon, Penn's Treaty with the Indians, Archimedes, Santa Clauseven contemporary figures like P. T. Barnum, Lord Byron, Jenny Lind, Daniel Webster, and yes, Andrew Jackson. Other notes depicted allegorical figures representing commerce and industry, or stock figures such as slaves, farmers, tradesmen, and sailors. Still others showed ships, railroads, canals, wharves, shops, and other symbols of commerce. With every bank commissioning money of its own design (and in denominations, sizes, and colors of its choosing) more than ten thousand different kinds of notes bobbed up and down in the streams of commerce by the late 1850s, continually changing hands and baffling the uninitiated. Even the phrenologist George Coombe, no stranger to reading appearances, marveled in 1841 that "it has become a science nearly as extensive and difficult as Entomology or Conchology, to know the value of the currency."

Fig. 2. Back of the three-dollar bill, printed in Philadelphia, May 10, 1775. Courtesy of the American Antiquarian Society.

As Coombe recognized, the simple act of reading these notes posed a substantial challenge, one that grew more acute with every passing year. Early on, when only a few banks issued notes, it was relatively easy to remember the different designs, which made detecting counterfeitsor at least poorly rendered counterfeits a relatively simple task. But as the decades passed, the market economy took root in the most remote corners of the new nation. Where the market went, banks and bank notes followed. And within the widening compass of capitalist relations, these monetary hieroglyphs drifted ever further from the institutions that issued them, making it increasingly difficult to keep track of the currencies in circulation, much less spot a fake.